Inflation rises to 3.52%

Published: 19 February 2018

ZIMBABWE's year-on-year inflation gained 0.06 percentage points last month to 3.52 percent from the December 2017 rate of 3.46 percent, official statistics show.

The Zimbabwe National Statistics Agency (Zimstat) revealed yesterday that the figures mean that prices as measured by the all items Consumer Price Index (CPI) increased by an average of 3.52 percent between January 2017 and January this year.

"The year-on-year inflation rate (annual percentage change) for the month of January 2018 as measured by the all items CPI stood at 3.52 percent, gaining 0.06 percentage points on the December 2017 rate of 3.46 percent," it said.

Despite gaining 0.06 percentage points to 3.52 percent, Zimbabwe inflation is still within the Sadc's benchmark, which averages between three and seven percent.

In the 2018 monetary policy statement, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya noted that the risk of inflation would be mitigated by the positive domestic and international good will following the new economic order and political dispensation in the country.

He said the new economic order and political dispensation was already having some dampening effects on speculative tendencies as well as on adverse inflationary expectations.

"On the other hand, external factors such as further strengthening of the South African rand against the US dollar, high demand for imported goods and services, and surge in oil prices may continue to put pressure on domestic prices," said Dr Mangudya.

He said the Central Bank would therefore continue to closely monitor price movements and take pre-emptive and corrective measures to contain inflation to the Sadc target of between 3.7 percent by year end.

Between January and November 2017, food inflation was largely accelerated by prices of meat, vegetables and fish. Dr Mangudya said the decline in the price of bread and cereals was a response to the 2016/17 bumper harvest.

"The increase in food inflation was partly due to supply factors particularly in relation to meat, poultry and fish while the sourcing of foreign exchange on alternative markets escalated the production costs," noted the RBZ boss. - online